The Impact of Industrial Decentralisation Policy: The Businessman's View

Abstract

The responses to a postal survey by 81 industrialists located in the homelands are analysed. South Africa’s industrial decentralisation policy has been criticised on many grounds. Questioning the efficiency of the policy in terms of forgone growth and employment opportunities, information was sought from businessmen: particularly with regard to their motives for decentralising and their experiences. The underlying rationale being that the profitability of decentralised firms provides a means of assessing allocative efficiency. The nature of the sample dictates a simple tabulation of responses. These reveal a high degree of dependence on decentralisation incentives both in respect of the decision to decentralise and in terms of maintaining companies ‘profitability’. Some of the difficulties experienced by industrialists at their decentralised locations are examined. The importance of the incentives, particularly short term ones, calls into question the prospects for self-sustaining growth of the decentralised industrial base and its stability over time. Also implied are the adverse effects of the policy on growth and employment opportunities in general.